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The Citizen, The State and 
Our Economic System 



ADDRESS 



by 



ROBERT VON MOSCHZISKER 



at 



DICKINSON COLLEGE 



Carlisle, Pa. 



COMMENCEMENT DAY 
JUNE 6, 1922 






THE CITIZEN, THE STATE, AND OUR ECONOMIC 

SYSTEM 

This ancient seat of learning, situated, as it is, in one 
of the most beautiful parts of Pennsylvania, has a won- 
drous attraction for me ; so, when Dr. Morgan extended 
an invitation to address you, of course it was accepted. 
Then I cast about for an interesting topic, and finally de- 
cided to treat of the Citizen, the State, and our Economic 
System, — broad subjects for a comparatively short dis- 
course, but very important to consider at this particular 
time. 

You and I are privileged to live in a marked period 
of evolution; we are seeing old familiar, geographical, 
social, political and economic lines changed and change 
ing, probably as never before in the world's history. In 
the midst of such stirring events, the question naturally 
arises, What part shall we play! What can we con- 
tribute towards solving the problems of the moment 
and of the immediate future? These thoughts must 
come to every right-minded man, particularly to those 
of us who, through opportunity, either afforded or cre- 
ated, have been privileged to drink at the fountain of 
knowledge, and, therefore, are better equipped than our 
less fortunate brothers to grapple with the questions 
of the day. 

We cannot all play leading parts, apt to win the 
plaudits of our fellowmen, — although these roles may be 
in store for some of you, who will step from this room 
into the world of endeavor ; but every one of us can study 
to gain an understanding of the problems at hand, and, 
in our own way, within our own sphere of influence, 
preach the truth, thus helping to overcome some of the 
social and economic heresies with which the period is 
beset. One of the chief of these, I fear, is a pre- 
vailing notion that the State must care for, shelter, and 



even nourish its members, constantly regulating and guid- 
ing their personal and business conduct. 

This is not only an erroneous idea, but a most harm- 
ful one to the individuals who make up, in the aggregate, 
that mystical something, which, for want of a better 
name, is termed ' ' the State. ' ' 

What is this thing we call the State, and what are 
its true obligations ! The old-fashioned conception of the 
State pictures a sovereign power, typified by a govern- 
ing head of some sort, possessed of a divine right to exact 
service from every subject, and, as a consequence, owing a 
return of paternal care. This is not a true outline of the 
general conception today, and surely it presents no cor- 
rect picture of the American idea. To us, the State is the 
official machinery of organized society, to formulate and 
administer the law of the land, for the welfare of all the 
people. 

I use the term " official machinery' r advisedly, for the 
political State is but a part of the mechanism which so- 
ciety must depend upon to keep its wheels moving steadily 
and with security. 

There is also the organized church, which most mod- 
ern schools of thought dismiss from their calculations 
with small ceremony ; yet the influence of this institution, 
working its way through many forms of religion, has for 
centuries past done more to control the individual and 
collective actions of civilized and semi-civilized men than 
any other one element. While the church may seem to 
lack old-time vigor just now, yet it will go on, always a 
great force, and eventually come into its own, — not to 
control the political State, for that is an undesirable con- 
dition of affairs, — I mean it will establish its own due in- 
fluence on the life and conduct of the individuals who 
compose the State, and this will be accomplished through 
the medium of proper teachings and the general recogni- 
tion that all law and power emanate from on High. But, 



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aside from strictly religious considerations, the church — I 
use the term in its broadest sense — even today has a moral 
and social influence, which, to my mind, is incalculable, 
and he who dismisses it lightly, when considering the 
problems of organized society, makes a grave mistake. 

Then there are the powerful forces of business, in- 
dustry and labor, all of which, of recent years, have 
shown a progressive tendency toward stronger and more 
compact organization for self-preservation and govern- 
ment; and, with us in America, if not elsewhere, there is 
another great influence upon the conduct of men, 
both individually and en masse, — the mighty body 
of fraternal and charitable associations existing through- 
out the land, which is ever on the increase. 

Each one of these forces, — and many other compara- 
tively minor ones, of which I cannot now take time to 
speak, — has its own place and particular function in the 
workings of modern society. While it may prove expe- 
dient, and at times necessary, for the State to exercise 
some control over such groups, when their activities af- 
fect adversely the material or economic life of the people, 
or threaten the welfare of society as a whole, yet, even 
then they should be interfered with to an extent only 
that may prove absolutely necessary, and, as a general 
rule, their functions ought not to be taken over by the 
State itself. In my opinion, under ordinary conditions, 
no regulation of the economic and social life of the peo- 
ple, not actually required, should be indulged in by their 
government. 

I leave out of account times of war, for then many 
rules for individual conduct must be made and a host 
of activities controlled that no government should med- 
dle with under normal conditions — democracies instinc- 
tively and inevitably become autocracies in times of war ; 
in periods of peace, however, the State ought not to 



attempt any general supervision over business or undue 
restraint of the social life of the people; these powers 
of control should be exerted only on those rare occasions 
when the public welfare imperatively demands their ex- 
ercise. 

You may ask, why? First, because each step in the 
direction of such general supervision is a move toward 
the reorganization of society along socialistic lines, and 
this, unless all history fails, is bound to prove anti- 
democratic. Such a scheme of government naturally 
leads to an all-regulating overlordship by those in con- 
trol; for, under the socialist State, society, to regu- 
late its vastly increased public affairs, must have in 
control men of iron will, " bosses " in the grossest 
sense of the term, who can brook no independence 
of thought or action — since man, voluntarily working 
in combination with his fellowmen, is not competent 
to govern such an all-powerful and complicated or- 
ganism as will be found necessary to carry on success- 
fully the political, industrial, business and social affairs 
of a people. Next, any prolonged attempt at running 
such an organization, instead of training a great body 
of officials to the required capacity, will be more apt to 
have the effect of breeding wholesale corruption, destroy- 
ing personal ambition among the masses, deadening in- 
dividual initiative, and moulding all men into a common 
form. Moreover, unrestrained governmental interfer- 
ence with the business life of a people almost invariably 
leads to efforts at control of economic laws; and these 
laws, like the mills of Grod, grind slowly, yet they grind 
exceeding small all who are so bold as to attempt to turn 
them from their natural course. In short, when the State 
undertakes to regulate to an undue extent the relations 
and conduct of those who compose it, and to take out 
of the hands of a people the personal management and 
control of their private property (a dangerous doctrine 



which is being widely advocated at this time), it enters 
upon an experiment which, at man's present stage of 
development, steps beyond the range of possible accom- 
plishment and is bound to lead to demoralization in in- 
dustrial life as well as the drying up of individual in- 
itiative, thereby bringing poverty and distress to the 
masses, instead of the contentment and happiness which 
they seek. 

To come back to a controlling thought, already ex- 
pressed: after all is said and done, the State, like every 
other human organization, must be conducted by men, 
and it is impossible to find any great number of men 
having the physical strength, moral caliber and intel- 
lectual capacity required for work such as would be 
called for by a socialistic reorganization of society ; this, 
to my mind, is enough in itself to forbid the experiment. 

Here, in America, until recent years, we have studi- 
ously avoided overcrowding the State with duties the per- 
formance of which would harass the individual in his 
private or business pursuits, yet we all know how diffi- 
cult it has become to get competent public servants to ad- 
minister our comparatively simple government, particu- 
larly for the leading positions, requiring executive ability 
of a high order. The more duties we crowd upon the 
State, the greater this difficulty will be ; it is quite possible 
to force it to the breaking point, and then — chaos ! 

It has been said that the duties of the State are to 
prevent crime and protect contracts; I should say its 
chief end is to render possible the substitution of law 
and order for force and discord. This is the real object 
for which the State exists, but the fewer laws, to accom- 
plish that purpose, the better for all concerned; and, 
even in the field of making laws, much should be left to 
the discretion of the various groups of inhabitants who 
combine, in particular lines of endeavor, or for 
other worthy purposes — the supreme power insisting 
simply that no group shall make laws for its own govern- 



ment which are antagonistic to, or inconsistent with, 
those ordained by the State itself. 

The thought just voiced is not new, nor does it de- 
note the radical thing known as syndicalism; for the 
syndicalists, as I understand their doctrines, would carry 
the idea of class autonomy to such an extreme as, in 
effect, to do away with the State. The plan I have in 
mind prevails with us in Pennsylvania at the present 
time, to a limited extent; for instance, any organized 
social unit, such as a beneficial or fraternal order or a 
general ecclesiastical body, may make its own rules and 
regulations, setting up its own tribunals to administer 
them, and, so long as the rules and regulations (which 
are really laws to those to whom they apply) do not trans- 
gress the general laws of the State, our courts will sus- 
tain the judgments of these private tribunals, that afford 
relief and adjust difficulties between such organizations 
and their members or that relate to other matters prop- 
erly covered by the laws of the body to which a 
complaining member belongs. Furthermore, the law of 
the land requires that the members of such bodies ask 
relief of their own tribunals before applying to the courts 
of the State. 

As the population of a State increases, and its social 
problems grow more complicated, there is every reason, 
to my mind, why the idea of group self-government should 
be encouraged ; I submit the thought, for your considera- 
tion, as an antidote to the existing tendency toward over- 
centralization of regulatory powers in the State itself. 

While I believe the present attitude is to expect too 
much of the State, yet I entirely disagree with those who 
would bring government to an irreducible, impotent mini- 
mum, without character or force; these people are an- 
archists or near-anarchists. One hestitates to use the 
term, for the mind immediately associates it with un- 
kempt, dirty men, red flags and bombs, rather than with 



the large school of so-called philosophical thinkers, who 
really believe that mankind would be happier, and the 
world more at peace, if there were no organized govern- 
ments or prevailing rules of law. The latter are the 
respectable, but none the less dangerous, class I have in 
mind. 

No one who has had to do with public life and has 
seen the minute workings of one important department 
of government — the administration of law in the courts — 
as I have for many years, and who knows by actual ex- 
perience how essential the machinery of the law is, to 
keep men from one another's throats, can have any real 
doubt about the absolute necessity for a well organized, 
properly functioning State. 

Of course, in conducting such a State, there are times 
and conditions which call for and warrant regulatory 
laws affecting the business and social life of the people; 
but what I wish to warn against is the attitude of mind 
that tends toward a system that would make the in- 
dividual dependent on the government for assistance and 
guidance in his business life and general course of con- 
duct, instead of self-reliant, as he should be, and has been 
in the past, so far as our country is concerned. This 
characteristic self-reliance is a distinguishing mark of 
the American, so much so that it is rapidly acquired by 
the intelligent immigrant; it must not be lost by putting 
upon the State those things which the people, in groups 
or otherwise, ought to do for themselves. 

We constantly hear attacks on our existing economic 
system, and there is a great propaganda throughout the 
world to substitute something else in its place, even by 
revolution if necessary, the most persistent demand being 
for control of the industrial and business life of the people 
by the State itself. Social and economic systems change 
by gradual development, and this is as it should be. In 
a formative state of society, we had the feudal system, 



8 

which grew into the wage system, and, as wealth in- 
creased, the present so-called capitalistic system came 
about. It did not, like Minerva, spring full-armed, out 
of the head of a mighty, selfish Jove, as some seem to 
think ; on the contrary, it is the result of years of growth 
and, unless put aside for something else, bids fair to go 
on, slowly, but surely, forming and reforming in accord 
with the demands of the period which it is serving. 

Under our present economic organization, as soon as 
one earns enough by personal effort to keep himself and 
those dependant upon him, and to lay aside a surplus, 
and this surplus is invested so as to produce or distribute 
something desired by the people, thereby building up a 
further surplus, that man is a real capitalist. 'When this 
capitalist joins his earnings with those of others, so that 
the whole is sizeable, and part of the net earnings of this 
bulk are from time to time reinvested, it gradually be- 
comes sufficient to render possible the marvelous indus- 
trial and commercial achievements of the present day. 

We see these accomplishments on every hand, in the 
vast means of production and distribution which meet 
the material needs and desires of the people ; and while 
many of us prefer the joys of intellectual life, rather than 
those which come from a business career, yet the indus- 
trial activities of the age, by example at least, spur 
every one on to the top notch of effort, no matter in what 
field he may be working, and they have a tendency to 
affect favorably the compensation of those engaged in 
the professions, sciences and arts; the toilers in these 
higher fields of endeavor are no longer dependent, as of 
yore, on governmental support or the kindness of a 
private patron, but can command a living by their work. 
Finally, the system offers lavish rewards to the fittest 
of those employed in business or industry, with a fair 
chance to others, of ordinary ability, to gain a livelihood 
or more, according to their worth. 



9 

There is one class, however, which, in the rise to 
wealth and power, we have rather sadly, and very fool- 
ishly, overlooked, and that is the devoted and all-impor- 
tant teacher in our schools and colleges, — those who have 
the grave responsibility of training the coming genera- 
tion; though, from all I hear, there has been a public 
awakening on this subject, which is bearing fruit. One 
cannot too strongly emphasize the dignity of this high 
calling, and the substantial appreciation which is its due. 

There was a time when the ordinary man in the 
ranks of capitalism did not get his fair share either of the 
direct monetary returns from the system or of the leisure 
it afforded to others; but this condition is rapidly dis- 
appearing, the masters in command now recognizing, to 
an ever-growing extent, the rights of those who labor in 
the ranks to a larger share of the direct and indirect 
returns of their work, and, in many instances, to a share 
in the management which produces these returns, as far 
as the management affects the lives of the workers ; this 
is a move in the right direction, which should be encour- 
aged. Then, again, of recent years, working conditions 
and, where the employer has control, living conditions, 
have been vastly improved; at the same time, the hours 
of labor have steadily diminished. 

Profit-sharing, also, is coming into vogue, and I hope, 
with the new idea of representation in the management, 
it may prove to be a development that, in the end, will 
solve those difficulties which we broadly term "labor 
troubles/' the adjustment of which, by any juridical 
means, has puzzled and is puzzling the minds of our best 
thinkers. I do not despair but that even this problem 
may be worked out; at least earnest efforts are being 
made in that direction, and, when some master mind finds 
a fair and practical way of constraining obedience to a 
decree against the employee, other than a forcible at- 
tempt to compel him to labor, we shall be on the way to 



10 

a proper solution, but not before. Harder questions than 
those presented by the problem before us have been 
met and answered in the history of the world; and, 
in due course of time, should profit-sharing and 
co-operation in management prove a success, capital 
and labor may mutually set up their own tribunals, fix- 
ing their own penalties to enforce their own decrees, and 
thus avoid the necessity of judicial adjustments by the 
State, with all the complexities which that plan presents. 
Many years, and the trial of many schemes, may be re- 
quired to bring the suggested programme to success, al- 
though in the end the desired result may be achieved 
so naturally that every one will wonder why it did 
not materialize sooner. That is the way great things 
often come to pass — seeming to develop suddenly; 
but, when this happens, it is usually the result of 
much prior cogitation by a host of thinkers — generally 
of a scientific turn of mind — whose ideas, through re- 
peated expression, materially affect those who control 
the world of action, even though, all the while, the in- 
dividuals thus influenced may lack conscious apprecia- 
tion of the fact that impressions are being made upon 
them. This being true, as it undoubtedly is, each well- 
ripened thought has reaF value, when contributed to the 
solution of momentous problems like those under dis- 
cussion. 

Just at this point, apropos of my remark that some 
master mind may find a workable method of judicially 
adjusting labor troubles, let me interject that by "master 
mind ' y I did not contemplate one engaged in the activi- 
ties of industrial or business life ; for, proficient as these 
men are in their own department of labor, most of the 
serious problems which concern the mass life of the 
people, be they in the applied arts or in the field of eco- 
nomics, are solved, not by those actively engaged in the 
production or use of the thing or method discovered, but 



11 

by students and thinkers — men in closets, who make the 
great tools of the world for the practical men to handle. 

These closet thinkers, or students, are those previ- 
ously referred to as men of a scientific turn of mind. It is 
the practical men, however, who must be depended upon 
to handle the tools the others produce ; and a distinctively 
good feature of our present system is the natural division 
of its vast activities into various units, which steadily call 
forth and educate an army of high grade practical 
workers, trained to management, thus keeping the stand- 
ard of efficiency high. In this respect, the plan is much 
superior to one that would enforce the doctrine of cen- 
tralization, or nationalization, of industry, the tendency 
of which, as I have said before, is to diminish the supply 
of managing talent, and thus lead to demoralization of 
production and distribution. Incidentally, this tendency 
should be kept in mind by those in control of American 
business, so they may see to it that, in making combina- 
tions, too great a degree of centralization is not indulged 
in; but we may assume the mass sense of the people, as 
expressed by their representatives in government, will 
always impede any attempts at undue centralization of 
private property, so long as the existing economic scheme 
continues. To this extent, I entirely agree that inter- 
ference by the State is not only justifiable, but also sanc- 
tioned by a long line of English precedents. 

Of course the system under which we operate has 
developed, and no doubt will continue to develop, flaws 
and sources of irritation ; but these can be, and are, con- 
stantly eliminated or remedied. For instance, when it 
was found that great monopolies were becoming a menace 
to the public welfare, legislation met the condition thus 
created, such as the anti-trust laws, the interstate com- 
merce laws, and the numerous public service commission 
acts ; and, when it was found that the workmen engaged 
in our vast industrial life, and those dependent upon 



12 

them, were not properly cared for in cases of injury 
or death, workmen's compensation laws were enacted to 
cope with this condition. We are now engaged, by legisla- 
tion and otherwise, in an effort to cure the evil of fictitious 
values so often given stocks and corporate securities. In 
the field of tariff legislation, it often happens that those 
advocating protection, instead of seeking to get Congress 
to consider whether the rates sought are calculated to 
benefit the country as a whole, which is the true criterion, 
avowedly ask special benefits for themselves ; rates deter- 
mined on that basis represent a clear abuse of power. 
This is coming to be understood, and, eventually, no 
doubt a way will be found to eliminate it. 

All of the curative efforts to which I have called at- 
tention present proper exercises of the power of the State 
to meet situations brought about through the operation 
of our economic system, which, either directly or in- 
directly, adversely affect the general welfare of the 
people; and, under our form of government, as it has 
developed, the right of the State — by virtue of what is 
known as the police power — to make all changes required 
for the health, happiness and welfare of the people, is 
now firmly established. 

It looked for a while as though the so-called swollen 
fortunes of the very rich might develop into a public 
evil, but the present income and inheritance taxes, with 
our habit of dividing estates among all the heirs, instead 
of holding them together in the hands of a favored one, 
have, I believe, effectively dissipated that danger, and 
the day of the overrich is rapidly passing, although we 
still see vulgar displays of recently acquired wealth 
around us. 

I can well understand how many persons, of little 
means, with no luxury in their lives, are filled with an 
envy that engenders hatred, when they watch the dis- 
play of wealth indulged in by some, who have either 



13 

legitimately or otherwise gathered in the prizes of capi- 
talism; but, as against this offensive class, who use their 
fortunes in a purely selfish way, there must be offset 
the other class of rich persons, who look upon wealth as 
a trust to be administered for the public; these are the 
men who build churches, support art galleries, open parks, 
found libraries, aid music, establish hospitals, encourage 
research, and substantially recognize good work or noble 
deeds on the part of others. The wealth in the hands of 
this large and growing class is rapidly returned to the 
people in well-administered ways; in fact, in many in- 
stances, it is better, more intelligently and less selfishly, 
administered than it would be by the people themselves, 
if they had it in their own possession. When we think of 
the vulgar, objectionable rich, produced by the system, 
we must also give a thought to the great creators and 
distributors of wealth like Mr. Westinghouse, Mr. Car- 
negie and others of their kind, and to the many posses- 
sors of small fortunes who live quietly and help their 
f ellowmen wherever they can ; but, more particularly, we 
must remember the vast army of wage earners, who, 
through the operation of the system, in normal times are 
kept constantly employed; and, in this connection, we 
must recognize that most of the wealth of the present 
day would not exist if it were not for the combination 
of the brain worker and the brawn worker, who, together, 
really create wealth out of material resources that other- 
wise would remain dormant. 

In considering the part contributed by the brain 
worker to the combination just mentioned, and the com- 
pensation the leaders in that department retain for them- 
selves, it must be remembered that the nature of men 
engaged in this kind of constructive work often demand 
an expensive manner of living, in order to function 
properly. I am told that the great Mr. Westinghouse, the 



14 

working of whose mind gave fortunes to many, and fur- 
nished employment at good wages to thousands, asserted 
repeatedly that, without a private car to travel in, and 
homes at several points, to make his life perfectly com- 
fortable, it would have been impossible for him to 
do his best work; which was no doubt so, for he 
was a true man, and, in his own way, a simple one, but 
not one to be judged by ordinary standards. Men of 
Mr. Westinghouse's caliber will always command a very 
high return from their labors, but my prediction is that, 
from now on, those at the top will get proportionately 
less, and those in the ranks proportionately more, from 
the fund of wealth which they create in common. 

These men of genius and those of the normal type 
constitute the personnel of the industrial and business 
organization under which we live; together, they have 
brought the existing system to its present state of suc- 
cess. The question is, Shall they continue to work in com- 
bination along established lines, or look for other 
ways? During the titanic struggle which recently 
ended, we became accustomed to taking chances — re- 
gardless of the future — on all sorts and kinds of 
changes; this attitude was natural and even essen- 
tial to those times, for such a state of mind had to 
prevail or the war could not have been waged success- 
fully. In those days, we "scrapped" material things 
with a heedless hand, and, almost recklessly, abandoned 
old ideas to experiment with new ones; now a time has 
come when we can ill afford to discard anything until 
it has fully served its purposes, and certainly it cannot 
be said that our present industrial and business organi- 
zation has reached that point. In other words, there is 
no good reason to believe we have come to the point 
where capitalism can be put aside with advantage; nor 
that there is in sight a worthy successor to this system — 
founded on the creation, private ownership and control 



15 

of property — with its rich prizes ever in sight, for those 
who fit themselves to strive for them, and lending, as 
it does, a constant incentive to personal effort. 

We must remember that an appeal to the selfish in- 
stincts of man, through substantial rewards to be gained, 
hard and materialistic as it may sound, is a chief incen- 
tive to material accomplishment, and, no matter what the 
form of government or economic system, the work of pro- 
duction and distribution must be done by the people them- 
selves. 

Production, distribution and consumption are the 
main factors in all industrial schemes; and since it is 
the people who use the output, the plan which best tends 
toward large production and efficient distribution, helps 
each one in his capacity of consumer. This is a con- 
sideration of serious moment when we contemplate a de- 
parture from our present system, particularly if we think 
of agreeing to the substitution of a purely centralized 
one, such as is persistently urged by those who, because 
of existing defects, most clamor for a change. 

It often happens that a comparatively small, but 
ugly, blemish on the exterior of something of real value 
so prejudices one that, without deeper consideration, 
he will unjustifiably condemn and abandon it as a whole ; 
no doubt our system has many such blemishes. Thought- 
ful educated people ought to endeavor to understand the 
problems raised by these defects, and to seek proper 
remedies; but, at the same time, they should discourage 
all efforts to break down the existing organization of 
society — the product of the experience of ages — under 
which we have grown strong, happy and prosperous. 
What I mean is, we should find ways to remedy such 
faults as the system has, rather than encourage thoughts 
that contemplate a radical change in the present methods 
of conducting our affairs; for, if nothing worse, such a 
substitution would, of necessity, require us to endure all 



16 

the sufferings which are bound to come through experi- 
menting with unknown forces; and that these can be 
great and unendurable is shown by Russia's experience. 

Just at this time most of the thinking, writing and 
talking on the subject in hand is being done by those who 
do not believe in our institutions ; principally, I believe, 
because they have not been able to take their place in so- 
ciety as now organized. These people would do no better 
under any other system. 'What we need is that those who 
have read and thought on social and economic subjects, 
and who have convictions of their own in favor of our kind 
of government and our general plan of business and in- 
dustrial life, should speak out and meet the attacks of 
those who do not believe in them; and we need a more 
general interest in the affairs of the State by those who, 
in their individual lives, have shown themselves com- 
petent to gather the best fruits of the existing order. 
By ' 'fruits" I do not mean the accumulation of wealth 
and power, but rather the achievement of a reasonable 
degree of worldly prosperity and spiritual contentment. 

Some people point to the prevailing business depres- 
sion as evidence of defects in the existing order ; but this 
is entirely unjust, for all must agree that it is not fair 
to judge any economic plan by the results obtained under 
extraordinary conditions, brought about by an unprece- 
dented world upheaval such as we are now passing 
through. If this is to be the standard, however, then I 
claim that, considering the adverse conditions, the results 
obtained by the working of the capitalistic system, here 
in America, are remarkably satisfactory. 

Please do not suppose, from anything I have said, 
that I believe the sum total of virtue lies in our present 
political or economic methods ; on the contrary, it is my 
belief that we can gain much by studying all advanced 
schools of thought, and by borrowing therefrom whenever 
convinced they present points of merit. This course 



17 

has been adopted in New Zealand, and, to a less degree, 
in Australia, with varying opinions as to its success. 

It does not do to "stand pat," since that means an 
end to all progress ; and, when property rights come in ac- 
tual conflict with human rights, always support the human 
rights side of the controversy. For instance, if an in- 
dustrial or business enterprise cannot pay a living wage 
and succeed, or if such an undertaking requires the use, 
to a harmful extent, of child or female labor, it had better 
fail, no matter how much property may be involved ; so, 
if the success of any business venture is likely to prove 
harmful to the morals or best interests of the people as 
a whole, the fact that it may serve to create property is 
not a sufficient saving grace. These principles are now 
recognized, and matters such as those just mentioned, 
with others in the same category, are controlled by a 
course of regulation that has become an established part 
of our system ; this, when kept within due bounds, is an 
excellent thing, — however, within such limitations official 
interference must be kept, or, experience shows, it rapidly 
degenerates into an evil. 

It is my conviction that, as a general rule, the regu- 
latory power of the State should be exerted only as a last 
resort ; and, in each instance, when the purpose of its use 
has been fully served, the assertion of the power should 
be withdrawn in that particular field, the principle being 
constantly kept in mind that those who compose our eco- 
nomic, industrial, trade and business life ought to be 
allowed and encouraged to manage such affairs to the 
greatest possible extent, their control to be interfered 
with only when an abuse of power, detrimental to the 
people as a whole, plainly appears, the function of the 
State in this respect being solely to serve the public wel- 
fare, not either to foster or retard individual develop- 
ment, — that should be left to other agencies. 



18 

The thought may have occurred to some of you that, 
during the course of these remarks, I have intermingled, 
and, possibly, confused the political and economic systems 
under which we are working; but, while separate, the two 
have come to affect each other so intimately that, to a 
very large extent, they must be considered in common. 

You may also think from my address today that I 
have a rather restricted idea of the State. My conception 
is, briefly, this: The State is an organization set up by 
the people to preserve liberty under law, to assist, 
where necessary, in the control and management of 
their common affairs, and to serve as a medium by 
which, in case of threatened or actual danger, their 
sentiments of loyalty to country may be brought into 
effective play for the general defense. In passing judg- 
ment on this definition, you must not confuse State and 
Country. One owes it to the government under which 
he lives to take an interest in public affairs, even to a 
reasonable participation in so-called practical politics, 
to endeavor to keep the State on the right track, so far as 
its laws and institutions are concerned, and to carry on 
an orderly life under those laws and institutions. Duty 
to Country is a larger thing: a man's country embraces 
the national family of which he is a loyal member; it 
comprehends the land where one lives, or, if away, to 
which the heart clings with the hope of return; it is 
home, in the largest sense of that beautifully compre- 
hensive word; it is the place whose traditions one shares, 
and for which, if need be, he will offer up his fortune 
or even life itself. 

Almost a century and a half of history have shown 
that, with an American audience, it is not necessary to 
dwell on the theme of loyalty to country; but the obliga- 
tion of the State toward the individual, and his duty to 
it, are matters which the trend of events leads me to think 
we can consider with profit. My message may be summed 



19 

up thus : First, do not look upon the State as a universal 
doctor; if, either as an individual or as a member of 
a group, you need an economic, stimulant or social remedy, 
try to cure yourself before rushing to the State for 
aid; constantly remember that the State is created for 
the benefit of the whole body of the people, not for the 
benefit of special individuals, groups or classes. Next, 
it is every educated person's duty, when he takes his 
place in the world of action, to give thought to the prob- 
lems I have mentioned today; he should endeavor to 
understand, at least in a general way, the governmental 
institutions and economic systems of the world, past and 
present, likewise those proposed for the future. Finally, 
before condemning the institutions and system under 
which his country has lived and prospered, and com- 
mitting himself to some experiment never tested in the 
laboratory of experience — or, when tested, found want- 
ing — he should hestitate long, to assure himself of the 
right of his course. The economic system which has 
grown up and taken its present form side by side with 
our political institutions, sharing with them much com- 
mon history and tradition, is entitled to an examination 
of its faults and virtues ; and if one is convinced that, on 
the whole, it is calculated to serve society better than any 
substitute offered in its place, then it is his duty to stand 
forth armed with conviction, ready to do battle for his 
belief. The kind of government we possess has been 
centuries in the making ; its germination was in the Eng- 
land of a period prior to William the Conqueror. This 
political system has developed and changed, slowly but 
surely, according to the necessities of the times it was 
serving, the roots, however, always remaining embedded 
in liberty and liberalism. We must see that these roots 
are not plucked up, nor the tree allowed to wither; 



20 

equally with this, we must have a care that the branches 
are pruned, as needs be, so they shall grow in the way 
most useful to mankind as a whole. Such are the duties 
that I hope my message may help you to realize. 



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